Impact of Catastrophic Risks on Insurance

• Author: Roxana Ionescu, Paul Tanasescu
• Position: Senior Lecturer, PhD, 'Dimitrie Cantemir' Christian University, Bucharest, Romania/Senior Lecturer, Phd, University of Economic Studies, Bucharest, Romania
• Pages: 192-199

European Integration - Realities and Perspectives. Proceedings 2020

192

Impact of Catastrophic Risks on Insurance

Roxana Ionescu1, Paul Tănăsescu2

Abstract: Like many other regions of the world, the European Union is vulnerable to almost all types of

natural disasters. The damage history of each European country confirms this. Disasters not only cause loss of

human lives, but also material damage that amounts to billions of euros every year, affecting stability,

economic growth and economic relations between member states. In a much broader context, in 1996 the

European Humanitarian Aid Service set up a disaster preparedness program for catastrophic risks, named

DIPECHO (Disaster Preparedness ECHO). Since 1987, the European Co uncil has established an agreement

open to all European countries , including the Russian Federation, entitled Europe - major risks. This

intergovernmental agreement is a vast platform for cooperation in the field of major natural and technological

risks between all European countries. The Green Paper on insurance agains t natural and man-made disasters,

which is a basic document in the actions of European countries to strengthen the management o f catastrophic

and non-catastrophic risks. The paper aims to present th e main risks that have occurred in Europe, their

intensity of production, the affected countries and their influence on the insurance market.

Keywords: insurance; insurable risk; catastrophe; international strategy

If we observe the evolution of the human society, we note that mankind has tried over time to control

nature through various means. Regardless of the current development of the humanity, we notice that,

unfortunately, controlling nature is not possible. Natural disasters that hit different regions are an

example of this fact (hurricanes, catastrophic floods, collapse of mining galleries, earthquakes).

Romania is not bypassed by them. We remember the catastrophic floods of recent years, followed by

periods of prolonged drought. Also, many of us remember the strong earthquake of March 4, 19773

that caused great material damage and loss of life.

Apart from these natural risks, there are all kinds of car accidents that occur on public roads. In

addition, the media presents daily acts of robbery, theft, etc. that seem to multiply with the

development of human society. Many companies go bankrupt, thus affecting other economic agents

and at national level the country's economy. Also, with the development of science and technology,

new risks appear, unknown until then, that affect our daily lives, property, or even economic life.

We enjoy some risks. We can win the lottery - risk of enrichment. We can have enviable health and

live a long life - risk of survival. But we do not like all risks. We can get sick - risk of morbidity. We

can die from various causes - risk of death. We can have an accident - risk of accident.

1 Senior Lecturer, PhD, “Dimitrie Cantemir” Christian University, Bucharest, Romania, Adress: Blvd. Splaiul Unirii,

Bucharest, Romania, Corresponding Author: roxy.ionescu@yahoo.ro.

2 Senior Lecturer, Phd, University of Economic Studies, Bucharest, Romania, Adress: str. Mihail Moxa, Bucharest,

Romania, E-mail: paul_tanasescu@yahoo.com.

3Known as the ‘77 Earthquake, it was an earthquake with a magnitude of 7.2 and a duration of 55 seconds. It caused,

according to official sources of the time, 1578 human casualties, approximately 11,300 injured and significant material

damage.